Wednesday, February 28, 2018

EADACPA v. MIRCA

Avila v. S. Cal. Specialty Care, No. G054269 (D4d3 Feb. 26, 2018)

On behalf of his incapacitated Father, Son signed papers admitting Father to a Nursing Home, in his capacity as Father’s agent under a statutory power of attorney. Father died in the home three days later, the apparent result of his aspirating due to a poorly installed feeding tube. Son sued for negligence, elder abuse and wrongful death, the first two claims brought as Father’s successor, and the latter brought on his own behalf.


Tuesday, February 27, 2018

Anti-SLAPP Movant Can Take the Complaint at Its Word.

Bel Air Internet, Inc. v. Morales, No. B270268 (D2d2 Feb. 26, 2018)

So Code of Civil Procedure § 425.16(b)(2) says that an anti-SLAPP motion should be decided based on the “pleadings” and the “supporting and opposing affidavits stating the facts upon which the liability or defense is based.” But a moving Defendant's burden isn't really evidentiary. It just needs to show the claim “arises from protected activity” which ordinarily is done by reference to the complaint. So while the Defendant could submit evidence to meet that burden, it is not required to. (For instance, if a complaint is based on statements, but omitted that they were made in court, Defendant could put that in a declaration to sustain its burden.) A Defendant is not, in any event, required to prove the truth of any facts pleaded by the plaintiff.

Also, the Court comes down pretty clear you don’t need a reporter’s transcript in the record on an anti-SLAPP appeal. The appeal is de novo based on the filed evidence and pleadings, so the only thing in the oral record would be legal arguments before the trial court. While that stuff might provide some useful context, it is not necessary for the Court of Appeals task.

Reversed.

Friday, February 23, 2018

Truckers II

Muro v. Cornerstone Staffing Solutions, Inc., No. D070206 (D4d1 Feb. 23, 2018)

Plaintiff is a trucker bringing a wage and hour class action against the Temp Service that employs him. His employment contract has an arb clause with a class action waiver. But as was addressed in the 2015 Garrido case, the FAA has a carve out for transportation worker contracts. So the clause is measured under California state arbitration law, which still applies a pre-AT&T v. Concepcion rule that usually invalidates class action waivers. Which happens here. So, like Mr. Garrido, Plaintiff here gets to keep his case in court as a class action.

Affirmed.

Settling Personal Claims Kills PAGA Standing

Kim v. Reins Int’l. Cal., Inc., No. B278642 (D2d4 Dec. 29, 2017)

Plaintiff here brought some PAGA claims along with some regular wage and hour stuff. The wage and hour claims got sent to arbitration, and the PAGA claims—which can never be sent to arbitration—were put on ice while that was happening. The parties settled the stuff in arbitration, and as part of that, Plaintiff dismissed those claims with prejudice.

Wednesday, February 21, 2018

Founder Fends Off Parol Evidence Challenge to Oral Put



Founder was selling his company to Buyers, a private equity outfit. He wanted to just cash out and be done. But Buyers—as private equity guys often dowanted Founder to stick around and keep some skin in the game. So they offered part of the consideration in equity. Founder grudgingly accepted.

Friday, February 16, 2018

Ambiguities Do Not a Sham Affidavit Make

Turley v. Familian Corp., No. A149752 (D1d2 Dec. 22, 2017)

Under D’Amico v. Board of Medical Examiners, 11 Cal. 3d 1 (1974), you can’t avoid summary judgment by submitting a declaration from a witness that contradicts his or her deposition testimony. But for the rule to apply, it has to really contradict. There can’t just be ambiguities from which inferences of inconsistency could be drawn. 


Which was the trial court’s mistake here. The testimony wasn’t really inconsistent with the declaration. In the course of saying it was, the trial court’s order mischaracterized the depo pretty badly. And in any event, none of it mattered because even the depo testimony, standing alone, was enough to crated a fact dispute such that summary judgment should have been denied.

Reversed.

Thursday, February 15, 2018

SOL Is Not OTM

Boyd v. Freeman, No. B279246 (D2d4 Dec. 20, 2017)

When a case is brought to judgment, res judicata bars litigation of all claims that were brought or could have been brought in the first action. But it applies only when the first judgment is “on the merits.” Interestingly, a demurrer granted on statute of limitations grounds is not, for claim preclusion purposes, on the merits. Not sure why that is the case, but the case law seems pretty clear on the point.

Which means no res judiciata in this case. Of course, given that the prior case was dismissed on the statute of limitations, and that this case was filed three years after that, it’s hard to conceive of how this case isn’t also time-barred. But that’s apparently a problem for the superior court on remand.

Reversed.

Wednesday, February 14, 2018

Attachment 101

Santa Clara Waste Water Co. v. Allied World Natl Assurance Co., No B279679 (D2d6 Dec. 20, 2017)  

To obtain a pretrial writ of attachment, the plaintiff needs to make an evidentiary showing of the “probable validity” of its claims. Code Civ. Proc. §§ 484.090(a). I.e., it must be “‘more likely than not’ [that] the plaintiff will obtain a judgment on that claim.” § 481.190. An order granting an attachment is immediately appealable. § 904.1(a)(5). The Court here affirms appeal of a granted writ of attachment, because the plaintiff did, in fact, show probable validity of several of its claims.

Affirmed.

Tuesday, February 13, 2018

Monday, February 12, 2018

§ 47(b) Privilege Yields to the Insurance Fraud Prevention Act

People ex re Alzayat v. Hebb, No. E066471 (D4d2 Dec. 19, 2017)

In this case, Plaintiff has brought a qui tam case alleging that his employer and a supervisor violated the Insurance Frauds Prevention Act by making false statements in an incident report and lying in a deposition in worker’s comp proceeding. Generally, that kind of statement is protected by the litigation privilege in Civil Code 47(b). But the Court here finds that the IFPA is a specific statuary scheme that foresees assigning liability based on false statements made in connection with, among other things, workers’ comp proceedings. Under those circumstances, § 47(b) would make the IFPA inoperable in significant part. When that happens, courts have found § 47(b)’s general privilege to yield to the more specific statutory scheme where the Legislature expressed an intent that liability for the statement should, in fact, apply.

Reversed.

Saturday, February 10, 2018

Can't Hide Forever . . .

Creed-21 v. City of Wildmar, No. E066367 (D5 Dec. 19, 2017) 

This is a CEQA administrative mandamus case challenging the development of a Walmart in Riverside County. Please don’t just stop reading. This isn’t about CEQA. It is about discovery sanctions.

Thursday, February 8, 2018

Fee Clause in Voidable Contract Gets Defendants Fees under CC § 1717

Cal.-Am. Water Co. v. Marina Coast Water Dist., No. A146166 (D1d1 Dec. 15, 2017)

Defendants won this breach of contact case by successfully arguing that the contract at issue was void under Government Code § 1090. The contract contained a provision that awarded attorneys’ fees to the prevailing party, and the Defendants won a fee award from with the trial court. But again, the contract was voided. So the question before the Court of Appeal is: “How can an attorney fees provision in a contract govern the parties’ fees obligations when the contract itself is deemed to have been void from its inception?” The answer is Civil Code § 1717.

Section 1717 exists to ensure mutuality of remedy in contractual attorney fee provisions. One way it does so is that when a contract that says only one party can get fee, under § 1717, any prevailing party can. And the other way is that when a defendant prevails by arguing that the contract the plaintiff seeks to enforce is inapplicable, invalid, nonexistent, or unenforceable, the defendant can nonetheless recover its fees.

There’s a different rule when subject of the contract is itself illegal. Section 1717 wouldn’t permit a prevailing defendant to recover a fee were an attorneys’ fee clause to appear in, for instance, a gambling contract. But the contract here wasn’t illegal—its subject matter concerned the operation of a desalination plant. It was voidable and ultimately voided because a public entity that was party to it had a conflict of interest. That’s not enough to take the issue out of § 1717.

Affirmed.

Wednesday, February 7, 2018

Getting Dirty in the Collections Game

Duke v. Superior Court, No. F073712 (D5 Dec. 13, 2017)

A CEO and two Investors were guarantors on their Company’s lease. After the Company breached the lease, the Company, the CEO, and the Investors were all held jointly and severally liable on a $385k judgment to the Landlord. 

Tuesday, February 6, 2018

Arb Clause Can't Stick to Signatory’s Employee

Jensen v. U-Haul of Cal. Co., No. E065887 (D4d2 Dec. 11, 2017)

Plaintiff was injured when a tire blew out on a rental truck he was driving, so he sued the rental company for negligence. But Plaintiff’s boss, not Plaintiff, had rented the truck. Boss also signed the rental contract, which had an arbitration agreement in it. The Rental Company sought to compel arbitration, which the trial court denied because Plaintiff wasn’t a signatory. 

Monday, February 5, 2018

Board Rollover Precludes Demand Futility for New Claims

Apple Inc. v. Superior Court, No. H044133 (D6 Dec. 11, 2017)

This case addresses an interesting question about demand futility in stockholder derivative actions.

Destined to End Poorly

Optional Capital v. Akin Gump Strauss Hauer & Feld LLP, No. B275274 (D2d1 Dec. 7, 2017)

In connection with an appeal in a related case just about four years ago, we discussed how judgment collection avoidance activities like fraudulent transfers in connection with phony settlements aren’t “protected activity” under the anti-SLAPP state, even though they might be tangentially related to a litigation. 


But after remand, Plaintiff in that case went off and sued the debtor’s litigators for assisting in those activities, on various theories. The attorneys filed an anti-SLAPP motion of their own. And this time it was granted, and the Court of Appeal affirmed. 


The case against the primary defendants is that they were hiding assets by manipulating the legal process. The asset hiding was the key to the claim. In contrast, the new case against the litigators is entirely based on what they did in the litigation. A client’s nefarious purpose does not render an attorneys litigation activities unprotected. There’s a difference between using the legal process as cover for your asset hiding—which isn’t protected—and conducting that process itself—which is. 

Which isn’t to say there can never be some liability if litigators are in cahoots with their clients in manufacturing a bogus litigation. But thats a question for the “success” prong of the anti-SLAPP analysis. To show that, Plaintiff would need to provide evidence of acts or statements that are not privileged under Civil Code § 47(b)’s absolute privilege for statements made in connection with a litigation. Plaintiffs didnt do that here.

Affirmed.

Friday, February 2, 2018

Second Shot for the First Time on Appeal

Sierra Palms Homeowners Assoc. v. Metro Gold Line Extension Construction Authority, No. B275241 (D2d7 Jan. 29, 2018).

California has an inefficient rule that if a demurrer is granted against you, you can argue for the first time on appeal that you should have been afforded leave to amend. Indeed, the standard is codified expressly into Code of Civil Procedure § 472c(a). And that’s what happens here. On remand, Plaintiff gets to amend to add an inverse condemnation claim against one of the Defendants, even though it never requested that relief in superior court.

Reversed.

Sargon, Take Me Away!

Apple Inc. v. Superior Court, No. D072287 (D4d1 Jan. 29, 2018)

Generally speaking, plaintiff who moves to certify a class needs to support the motion with admissible evidence to show numerosity, commonality, etc. Sometimes that evidence takes the form of expert opinion. And when it does, the opinion needs to hold up the admissibility standard for expert testimony. Since 2002, that means the standard from Sargon Enterprises, Inc. v. University of Southern California, 55 Cal.4th 747 (2002), in which the California Supreme Court led us out of the wilderness of the Frye rule and finally held that trial courts need to screen out expert testimony of dubious methodological reliability. That seems pretty obvious, and thats the way its done in federal court, where the analogous Daubert standard has been applied at the class cert stage forever. Which is probably why the Court of Appeal stepped in to grant a writ here.

Writ granted.

Thursday, February 1, 2018

Stare Decisis Carries the Day

Hernandez v. Restoration Hardware, No. S233983 (Cal. Jan. 29, 2018)

I wrote about this case when it was decided by the Court of Appeal in early 2016. Basically, the court held that because Code of Civil Procedure § 902 permits only a “party aggrieved” to appeal, a member of a certified class who objects to a settlement cannot appeal the overruling of her objection unless she formally intervenes and becomes a party. The court realized that result was inconsistent with a number of prior Court of Appeal decisions as well as federal class action practice. See Devlin v. Scardelletti, 536 U.S. 1, 14 (2002). But it felt bound by Eggert v. Pac. States S. & L. Co., 20 Cal. 2d 199 (1942), in which the California Supreme Court held, before the advent of modern class actions, that to have standing to appeal, a settlement objector needs to either formally intervene or file a motion to vacate the judgment under § 663. 

As I noted, the split was the kind of thing the Supreme Court needed to step in to sort out. And it did. And—somewhat surprisingly to me, at least—the Court affirms in an essentially unanimous opinion by Justice Chin. Basically, the general annoyingness of needing to move to intervene or vacate isnt enough to overcome the stare decisis effect of Eggert, which rested on a reasonable interpretation of § 902. While federal courts and courts of other states might disagree, they dont have § 902 to contend with. 

Justice Liu concurs to note that Eggert is out of wack with current class action practice federally and in other jurisdictions, and to explain that the policy rationale for it doesnt make a lot of sense. But since it’s based on the interpretation of a statute that the Legislature could fix were it so inclined, Justice Liu agrees that stare decisis carries the day.

Affirmed.

Arguably Unauthorized Settlement Is Voidable, Not Void, under Code of Civil Procedure § 437(d).

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